How can you take advantage of rates to earn riskless profit, Finance Basics

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How can you take advantage of rates to earn riskless profit

Problem

You observe the following market interest rates, for both borrowing and lending: One-year rate = 5% Two-year rate = 6% One-year rate one year from now = 7.25% How can you take advantage of these rates to earn a riskless profit? Assume that the expectations theory for interest rates holds.

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Finance Basics: How can you take advantage of rates to earn riskless profit

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